AUD/USD Strategy - Inflation Pressure Eases, Leading to Significant Drop in AUD

Fundamental Analysis:

Yesterday, the Chinese government expressed its intention to implement more aggressive fiscal policies and moderately ease monetary policies. This is expected to invigorate economic development, improving the outlook for China’s economy. As Australia has close trade ties with China, this briefly strengthened the Australian economy’s prospects, resulting in a short-lived rise in the AUD and AUD/USD.

Additionally, the Reserve Bank of Australia’s (RBA) rate decision, which aligned with market expectations by keeping rates unchanged, indicated a decrease in inflationary pressure in its policy statement. This could be interpreted as a prelude to future rate cuts, causing the AUD to experience a significant pullback, leading AUD/USD to turn bearish again.

Technical Analysis:

On the 1-hour chart, AUD/USD initially showed strong upward momentum, breaking through previous highs. However, the failure to hold at support indicates significant resistance above, maintaining a bearish outlook. If the subsequent rebound fails to break resistance, the downtrend is likely to continue.

Recommendation: Consider opening a light short position at 0.6422.

Target: 0.6360. Stop Loss: 0.6460.

Support: 0.6360. Resistance: 0.6422.

The above content is for reference only and does not represent the platform’s position. Stick to your strategy and implement appropriate risk controls.